Floor Talk November 8 (Report Day)

Corn is up 5 cents, soybeans are trading up 8 cents and wheat up a penny.

Mike

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REPORT REACTION:

One analyst says, "While the corn crop didn’t quite get to 14 billion bushels, it was close enough to give the bears very little to be concerned about. Ear count was down slightly, offset by ear weight which showed a slight gain. This makes sense as the cool weather during ear fill was THE difference this year and out-trumped the late-season dryness. The market needs to pay close attention to demand moving forward, as it’s pretty obvious that cheaper prices have become attractive to many end users in diverse consumer segments, most notably exports.

The 43 bpa soybean yield estimate may have surprised some but soybeans remain a market with robust demand.

All in all, I would say that we didn’t learn much from the long awaited November report."

Corn and wheat are trading slightly higher and soybeans are a bit lower, ahead of this morning's USDA Crop Production and S/D Reports at 11:00am CST.

What are your feelings about this one? Will Optioneye be right, thinking that since so many people are bearish that the USDA could release the opposite kind of numbers? Or, will the USDA satisfy the analysts printing those bearish numbers? What do you think?

Re: Floor Talk November 8 (Report Day)

Finally, the November crop report will be released at 11 am Central time tomorrow. It’s a vital collection of data that puts the market back on track as the information flow returns to normal after so many USDA reports were cancelled or re-scheduled. Since this qualifies as an unusual situation, will market reaction be unusual? It does seem volatility will be very high. It is assumed the algorithm traders will be out in full force. What exactly can happen? An algo trader has a very high speed computer and connection to the computer systems where electronic trades take place. Algorithms “read” the headlines that come across on news services and trade based on the headlines. If the first headline is bullish, the computer will buy. If the next headline is bearish, the computer will sell. Those of us with slower internet connections and slower brains can certainly trade, but for the first few minutes, it often seems dangerous. The long term trend does not look very pretty. Both South American crops and 2014 US crops are perceived to be larger. Of course, it is imperative that this occurs. Still, after years of poor yields, the market is more willing to embrace the thought that crop sizes will be larger in the future. The adjustment to lower prices and lower profit margins therefore continues. In the cycle of greed, hope and fear, farmers are somewhere in the hope or fear stages. Recent conversations suggest a small amount of hope for a post-harvest rally and fear over the direction of 2014 crop prices. The report will help determine whether the hopes and fears are correct. The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

In talking to the local coop manager yesterday, he told me the first 200,000 bu. of corn that came in was shipped out to pipe line as soon as it was dried. They are far from full and we are about done harvesting here.